Grafton shares rise on solid full year results

Shares in building supplies group Grafton rose 8% as the company said a strong contribution from its Isero acquisition in the Netherlands helped to boost full year operating profits by 14% to £142m.

Revenue was up 13% to a record £2.5bn, broadly split between organic growth and acquisitions, Grafton said.

There was strong organic growth in the Irish merchanting, Woodie's DIY and manufacturing businesses, the company added.
Isero contributed £9.1m to operating profit, an earnings before interest, tax and amortisation of 10.4%.

Cash generated from operations rose to £168.6m from £139.3m, resulting in net debt reduction by £17.3m and year-end gearing of just 9%. The dividend was lifted by 10% to 13.75p a share.

Chief executive Gavin Slark said the 2016 results represented an “overall strong financial performance despite challenging trading conditions in the traditional UK merchanting market”.

“These results demonstrate the resilience of the group's spread of businesses, with strong market positions and exposure to multiple geographies. While uncertainties remain about the UK economy, the recovery in the Irish and Netherlands markets is forecast to continue.”

“The group's very cash generative operations and strong balance sheet leave it well positioned to invest in areas where we see good opportunities for growth."